Stateline Tasmania

Incat

JUDY TIERNEY: A couple of years ago when Tasmania's largest private employer fell on hard times it sent shock waves through the community.

Incat sacked hundreds of highly skilled workers and the company, which ranked among the world's best in high-speed catamaran design and production, was bundled into receivership last year.

Incat survived that ordeal, but its work force and output were savaged.

The company is now concentrating on making money by providing charter boats and maintenance for the US Navy and so far the investment seems to have paid off.

But can it last?

TRACEY GRADY: These are the early stages of work on a new ship, a 98m high-speed catamaran, the most advanced model currently produced at this shipyard on the River Derwent.

It's proof that life goes on at Incat and production's continued since its last order was delivered in August.

The 'Swift' is on a 5-year charter with the US Navy.

And while there was much fanfare around its departure, it's left the company's future no more clear than before.

The new work-in-progress, Hull 62, is a boat without a buyer.

CRAIG CLIFFORD, INCAT MANAGING DIRECTOR: We're working on that boat to get it finished in time for the next Northern Hemisphere summer.

The boat is coming along nicely, but it will depend on monies and it will depend on commitments for the vessel moving forward as to exactly when we'll get it finished by.

TRACEY GRADY: Incat's American partner, Bollinger Incat USA, has apparently made it clear that a new ship must be in the works in case the navy wants to expand its charter fleet.

But so far that hasn't translated into a contract, meaning the boat will in fact be sold to the first comer.

CRAIG CLIFFORD: But at this stage we've got to get the basis of the boat built, the foundations of the boat and see where the opportunities rest.

TRACEY GRADY: But it's still the only boat that you can build between now and the middle of next year?

CRAIG CLIFFORD: Yes it is, yes it is, and we're going to make sure that we have it available so that when an opportunity comes, we don't miss it.

TRACEY GRADY: Incat's work force has now famously fallen from the glory days of about 1,000 employees to just a few hundred.

And it could get worse.

The Manufacturing Workers' Union fears jobs will dry up early next year unless Incat gets a firm order for Hull 62.

PHILLIP BAKER, MANUFACTURING WORKERS' UNION: Our understanding of it is -- and in discussions with Incat -- their view is that there is sufficient work to keep the current permanent work force in a job until February, March of next year and they'll do that through repair, maintenance and overhaul of existing vessels.

TRACEY GRADY: Repair and maintenance is a new focus to keep the money flowing in and to stay on the US military radar.

But, in a familiar refrain, the company is talking up the market for new ships.

CRAIG CLIFFORD: There really is an undersupply in the market at the moment.

Now the commercial operators have just finished a very successful Northern Hemisphere season.

Their summer's coming to an end, they're going through an assessment period after that and they'll be looking to establish themselves for next year, for 2004 services.

TRACEY GRADY: Craig Clifford predicts in the next 12 months orders will be placed for two to four new ships -- a medium to good result.

But the current work force of 250 can only handle one order at a time, putting the company on the back foot if there are any more orders.

PHILLIP BAKER: The process which Incat undertakes is quite specialised and there needs to be training undertaken.

The existing apprenticeship scheme provides for a 3-year training program and there is a school of aluminium welding located at the TAFE college adjacent to the Prince of Wales Bay site which of course these days is largely unused.

TRACEY GRADY: The prospect of Australia signing a free trade agreement with the US also offers a glimmer of hope.

It could provide a way around the Jones Act, which prevents foreign shipbuilders from selling to the US.

CRAIG CLIFFORD: I know that it's being addressed at a political level.

I've had various discussions with various levels of government when they acknowledge that our issue is one of many that is on the table between the Australians and the Americans.

I can't really predict the timing of that or where it's going to go, but from our point of view there's a push on at the moment to allow the Americans more access to our product.

NEIL JAMES, AUSTRALIAN DEFENCE ASSOCIATION: Certainly if we had a free trade arrangement with the US in the next couple of years it would certainly help Incat -- no doubt about it.

But it might not solve all their problems, it might not be the simple quick-fix solution that some people believe it might be.

TRACEY GRADY: Defence watchers believe Incat's best American prospects lie in one big project, a 7-ship contract for theatre support vessels to be awarded in the next few years.

JAMES NEIL: If Incat doesn't get a substantial contract with the American armed forces, particularly the army's theatre support vessel project, then Incat could be in reasonably serious difficulties in a couple of years time.

TRACEY GRADY: It's fuelled some speculation Incat may relocate all its operations.

CRAIG CLIFFORD: I think that there may well be a requirement for us to expand our current operation and provide our counterparts in America with some of our skills and some of our expertise and that's something that we're working on at the moment.

But no, I don't think discussion on Incat lifting up its skirts and going to America has any basis.

We're happy to explore opportunities, though.

TRACEY GRADY: So you absolutely reject that there is going to be any move away from Tasmania?

CRAIG CLIFFORD: Yes, Yes, I do.

TRACEY GRADY: There's some thought that staying put would be the best strategy.

DAMON THOMAS, CHAMBER OF COMMERCE AND INDUSTRY: In terms of the work force, we've got a skilled work force and other countries haven't got that skilled work force.

So the only thing we've got is distance from the world marketplace.

CRAIG CLIFFORD: I think we're a leaner operation, a smarter operation than we have been in the past and we're one that's very well poised to take hold of the opportunities that are readily there for a business such as ours.

TRACEY GRADY: Incat will have to be smart to show it can balance the limitations of its reduced size with remaining a player in a fiercely competitive world shipping market.

DAMON THOMAS: Bob Clifford is an amazing survivor and the community takes its hat off to the work that Bob's done and his team.

But they will always be in a marketplace which will need to be very carefully watched.